HMRC have informed me my new tax code is K1262 when i logged in.

pete1975

morning all, I really need some help regarding tax codes and i've tried to speak to HMRC over the last week but assume because its self assessment and time of year that they are very busy.    I"ve had a lot of tax code changes and was told by the accountant at work that the private medical at work substantially increased mid year and therefore tax codes were adjusted for all the staff.   
In july 2020 I reduced my salary to £50,000 and the remainder has gone to boost my pension pot.   

My tax code on last pay slip was 348L
In September 2020 my tax code was 883L ( and it was 883L all the way to feb 2020,  jan 2020 it was 841L (feb is when we get our pay increase and bonus)

When I logged into HMRC portal today is showing K1262X which then goes on to say minus £1262 

• Definition of tax code part K.K
  The definition of this part of your tax code is as follows:You have untaxed income which is more than your tax-free amount. This has been added to your pay or pension so the extra tax can be collected.
• Definition of tax code part 1262.1262
  The definition of this part of your tax code is as follows:£12,620 needs to be added to your pay or pension so the extra tax can be collected.
• Definition of tax code part X.X
  The definition of this part of your tax code is as follows:Your tax is based on your pay in each pay period, not the whole year. This stops you paying too much tax in one go. Your payslip or pension statement could show this as W1/M1, or week1/month 1.

I have tried reaching HMRC by phone,  cant see they have a live chat, going out of my mind with worry now and I sent a email to the accountant at work and he replied
''We have all had a big hit on tax re medical full effect coming through and your premium is high.

However I am surprised they say you owe that much, let’s have a look at the tax code calcs when it is issued in the New Year. Your pay will not be affected till it is issued''.

but I dont want to risk waiting to the next pay slip as the message from HMRC said they will 

We estimate that you have not paid enough Income Tax so far this tax year. You currently owe

£1,637.20

How this will be collected

We will start to collect this amount straight away.

To do this we have reduced your tax-free amount by £14,228. This means that you will pay more tax until 5 April 2021, so that we can collect the £1,637.20 owed.

Your tax code has been adjusted for this.

pete1975

I cant see how to edit my post because i knew id leave something out, and that is Child benefit, and previous years I just put money aside and pay it off,  but i did some digging within HMRC and found how they worked my tax out,  its showing child benefit
being £4518 but we only get £2501 which i pay back in full.  ive checked my tax return and it shows that as correct and not £4518

Dazed_and_C0nfused

I think the £4,518 is to collect £1,807 in Child Benefit (amount for 2 kids?), not £4,518 (£4,518 x 40% extra PAYE tax = £1,807).

But that is just provisional, your tax return finalises things.

What does your 2019:20 P11D show for Medical Benefit?

pete1975

Dazed_and_C0nfused said:

I think the £4,518 is to collect £1,807 in Child Benefit (amount for 2 kids?), not £4,518 (£4,518 x 40% extra PAYE tax = £1,807).

But that is just provisional, your tax return finalises things.

What does your 2019:20 P11D show for Medical Benefit?

hi thanks for reply, we have 3 children. 
my2019/2020 P11D shows £6158
the previous year it was £3458 but the company moved providers as the one we were in couldn't sustain the price any longer and then quoted a huge price. 

I've logged into my tax return and that's how i left it, i actually submitted it but i can see you can amend it so i wanted to check the child benefit i hadn't done anything wrong and its all correct and matches. 

Dazed_and_C0nfused

Your tax return is dealing with the facts whereas your tax code is a provisional attempt to collect the tax due for the current tax year.

If you want you could probably get the Child Benefit element removed from your current tax code and just pay everything for that via your next Self Assessment return (that doesn't apply to company benefits though).

If you do want to change your tax code then it is good idea to also check the estimated pay (the amount which you expect to be shown on your P60) HMRC are using, particularly if that has changed significantly, as that plays a part when tax code adjustments are calculated.

In july 2020 I reduced my salary to £50,000 

pete1975

I've found this on HMRC but im not sure if thats correct.

The only thing I can think of it private medical was 3458 on the previous P11d and now its 6158  (3458 – 6158 = £ 2700) so it still doesn’t match

pete1975

Dazed_and_C0nfused said:

Your tax return is dealing with the facts whereas your tax code is a provisional attempt to collect the tax due for the current tax year.

If you want you could probably get the Child Benefit element removed from your current tax code and just pay everything for that via your next Self Assessment return (that doesn't apply to company benefits though).

If you do want to change your tax code then it is good idea to also check the estimated pay (the amount which you expect to be shown on your P60) HMRC are using, particularly if that has changed significantly, as that plays a part when tax code adjustments are calculated.

In july 2020 I reduced my salary to £50,000 

right ok yes,  if i understand correctly, which i bet I don't.   Am i being charged tax on the child benefit, even though its paid back due to my wage.   
Also how do i go about doing something like this, ie not having it as part of my tax code and just paying it on my self assessment.  

the estimated salary confuses me more aswell,  I reduced it in July to put more in my pension and less 40% tax but we are also on a salary sacrifice scheme at work plus my taxable benefits are £7348 in total 

pete1975

the accountant at work has said '' 

But do not forget that this does not account for tax you have already paid this year in the 38k already received so the extra tax will not be the full amount''

and i asked him if it was worth using someone on the internet a self assessment specialist  and he replied with the following.. 

You are just wasting your money doing that, the reason you cannot get hold of them is that it is Christmas. Your wage will go down as re medical and child benefit you have not paid enough, going to advisors will just cost money. Your tax code for this year has changed and extra tax will be clawed back over the remaining months to April. Then a new tax code will be issued and there will be no back tax to pay. Tax codes always work in arrears.

Dazed_and_C0nfused

I would tend to agree, not sure what benefit there is for you from getting someone else to complete a return you seem perfectly capable of completing.

I think the main thing you need to do is keep each tax year separate and remember that tax paid during the year is effectively a large contributon towards your overall (Self Assessment) liability.

For example there will be a fair bit of extra tax due for 2019:20 on the company benefits as your tax code presumably had a much smaller deduction for this when compared to the actual benefit (P11D info).